MGP Ingredients to Acquire Penelope Bourbon
The upfront consideration is $105.0 million in cash to be paid at closing, with further potential earn-out contingent consideration of up to a maximum cash payout of $110.8 million measured through December 31, 2025 if certain performance conditions are met.
Premium plus American Whiskey brand consistent with MGP’s premiumization strategy focused on gross margin accretive growth brands
TCHISON, Kan., May 08, 2023 (GLOBE NEWSWIRE) -- MGP Ingredients, Inc. (Nasdaq: MGPI), a leading provider of distilled spirits, branded spirits, and food ingredient solutions, today announced that its Luxco, Inc. subsidiary has reached a definitive agreement to acquire 100% of the equity of Penelope Bourbon LLC (“Penelope Bourbon” or “Penelope”) and its related assets. Founded in 2018, Penelope Bourbon is a family and founder-owned and operated American Whiskey company with a diverse portfolio of high-quality whiskeys in the premium-plus price tiers. The acquisition includes all intellectual property and inventory of bottled product, as well as Penelope’s aging whiskey inventory on a debt-and-cash-free basis. The upfront consideration is $105.0 million in cash to be paid at closing, with further potential earn-out contingent consideration of up to a maximum cash payout of $110.8 million measured through December 31, 2025 if certain performance conditions are met, reflecting the brand’s current growth potential. The acquisition is expected to be financed using MGP’s existing revolving credit facility and cash on hand.
Transaction Highlights
- Enhances presence in growing American Whiskey category
- Expands portfolio of premium-plus price point brands
- Leverages Branded Spirits national distribution platform to extend Penelope’s reach
- Current MGP Distilling Solutions customer
- Expected to be immediately accretive to Branded Spirits segment gross margin and consolidated adjusted basic earnings per share after close
- Anticipated total cost synergies of approximately $5 million by December 31, 2025
- Transaction is anticipated to close in June 2023
“We are excited to welcome Penelope as part of our expanding premium-plus brand portfolio,” said David Colo, president and CEO of MGP Ingredients. “This acquisition aligns well with our premiumization strategy and our focus on growing high potential, high margin brands. Penelope is an excellent addition to our Branded Spirits portfolio as we look to expand its availability throughout our national distribution platform. We are enthusiastic about this acquisition and its ability to further our participation in the growing American Whiskey category while delivering meaningful long-term growth.”
“MGP has been an incredible partner of ours since we started our business in 2018. We are excited to take our partnership to the next level with the goal of accelerating Penelope’s growth for years to come,” said Michael Paladini, CEO & Founder of Penelope. “Since our initial product launch in 2019, it has been amazing to watch consumers embrace our brand. We look forward to expanding our partnership with MGP and building on our legacy,” said Daniel Polise, COO & Founder of Penelope.
Advisors
Reed Smith LLP acted as legal transaction advisor to MGP. TD Cowen served as exclusive financial advisor and BakerHostetler acted as legal transaction advisor to Penelope Bourbon.
About Penelope Bourbon
Founded in 2018, Penelope Bourbon has been one of the country’s fastest-growing whiskey brands. Named after the founder’s daughter, Penelope boasts a series of straight bourbon whiskey expressions that are all uniquely blended from three different mash bills. Remarkably smooth and flavorful, Penelope is perfect whether sipping neat or mixing in a cocktail.
Penelope’s core expressions, Four Grain, Barrel Strength, Architect and Toasted Series, have received over 30 combined awards and industry accolades. Most recently, the brand won Double Gold and ‘Best of Class’ at the 2022 San Francisco World Spirits Competition, and was awarded three Double Platinum Medals – along with the title ‘Blender of the Year’- by the ASCOT Awards (2022).
In addition to its cornerstone expressions, Penelope continues to introduce new and innovative limited releases within its Cooper Series, Private Select and Founders Reserve lines.
Today, Penelope Bourbon is sold in over 30 states and 4 countries. Proving that with enough love and care, and hard work, anything is possible. To learn more about Penelope, please visit penelopebourbon.com